Advanstar Sells Certain Assets, Including Entertainment Group4 Apr, 2005 By: Stephanie Prange
Advanstar Communications Inc., parent company of Home Media Retailing, has entered into an agreement to sell certain assets — including the entertainment group — to Questex Media Group for $185 million in cash.
The entertainment group includes HMR, its related Web site and conferences, and Home Entertainment Events (HEE), which includes the Video Software Dealers Association's Home Entertainment 2005, July 26 - 28, and the Adult Entertainment Expo, held each January. HEE is a joint venture with the VSDA.
Other groups to be acquired by Questex include the technology and communications, travel and hospitality, abilities, portfolio and beauty groups.
“I'm thrilled at the new opportunities this transaction offers us," said Don Rosenberg, publisher of Home Media Retailing and group director of Home Entertainment Events. "Along with our repositioning name change late last year, our message is clear. Digital media is everywhere, with DVD being the most significant form of entertainment on the planet. These changes reflect our commitment to our readers, viewers and advertisers for the years ahead.”
Questex Media Group is a new company formed by The Audax Group and Kerry Gumas, VP and GM of Advanstar's information technology and communications group. Gumas will head the Questex management team as president and CEO.
The acquired businesses generated approximately $100 million in revenue in 2004.
Advanstar will maintain publishing, trade show and other operations within its fashion, license, motor vehicle, healthcare, science and pharmaceutical groups, which generated approximately $275 million in revenue in 2004.
As part of the agreement, Advanstar will transfer to Questex an operating platform carved out of the existing Advanstar structure. In addition, Advanstar will provide certain support services and office facilities to Questex on a transition basis.
“We believe that by dividing Advanstar's assets into two groups, both companies will be better able to focus on core competencies, address customers' needs and capitalize on future opportunities,” said Joe Loggia, president and CEO of Advanstar.
“As a separate entity, the acquired divisions will have the ability to successfully grow from the foundation established under Advanstar,” Gumas said. “We believe this transaction will provide new opportunities for our employees and customers, and we look forward to the future prospects of Questex Media Group.”
The transaction is expected to close at the end of April 2005. As part of the transaction, Questex will assume the deferred revenue liabilities associated with the acquired properties, and will receive an adjustment for the negative working capital of the acquired properties. Advanstar intends to use the proceeds for general corporate purposes, which may include acquisitions or repayment of debt.